Capital Gains Tax: A Warning To All Those Selling Property!
Applies to any residential property sold after 6th April 2020 ...
Posted by Roger Eddowes on 07/04/2020 @ 8:00AM
From 6th April 2020, all individuals who sell a house or flat they purchased in the United Kingdom that is subject to Capital Gains Tax (CGT) will have to file a new CGT tax return and pay the tax due within 30 days ...
Be sure to find out if you will need to file a Capital Gains Tax return!
copyright: olegdudko / 123rf
Initially, it was rumoured that solicitors and conveyancers would complete the new CGT returns themselves and even deduct the tax due from the sale proceeds, but this isn’t going to happen now.
"It's now all down to the seller!"
If you find yourself in the position of having to pay Capital Gains Tax (CGT) on the sale of your investment house or flat, you must file a CGT return and pay within the deadline or you will suffer penalties and interest. Note that there are exceptions that apply for example if the property being sold qualifies as your main residence.
There are some important facts to note with this new legislation:
It applies to any residential property in the United Kingdom
If there is a mix of uses (residential and commercial) then you must proportion and declare the residential element
A return is only necessary when Capital Gains Tax is due
A return (and payment) is due for each disposal. So if two houses are sold and CGT is payable, there are two return filings and two payments
The disposals still need to be disclosed on the annual self-assessment tax return, which will include a reconciliation of the tax paid and payable
Although the housing market has stalled due to the Coronavirus pandemic, it will pick up again after lockdown with many buyers and sellers eager to move quickly.
The legislation has been in place for a while now, so it will apply to any disposal from the 6th April 2020. Be warned, and be sure to find out if you will need to file a Capital Gains Tax return.
Until next time ...
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About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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